Esco Technologies Inc 10-Q for FY2026 Q3

Esco Technologies Inc (ESE)

10-Q 2026-08-10 For: 2026-06-30

Added on August 10, 2026

About this 10-Q

Esco Technologies Inc filed this 10-Q on August 10, 2026, covering the quarter ended June 30, 2026 (FY2026 Q3).

Headline figures

Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $339.03M; up 14.4% from $296.34M a year earlier
Net income: $32.74M; up 25.6% from net income of $26.07M a year earlier
Diluted EPS: $1.26; up 24.8% from $1.01 a year earlier

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MISSOURI	43-1554045
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

645 MARYVILLE CENTRE DR., SUITE 300
ST. LOUIS, MISSOURI	63141-5855
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ESE	New York Stock Exchange

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


Class		Shares outstanding at July 31, 2026
Common stock, $.01 par value per share		25,907,567


	Three Months Ended
	June 30,
	2026		2025
Net sales	$	339,027	296,344
Costs and expenses:
Cost of sales		197,508	174,350
Selling, general and administrative expenses		71,002	62,042
Amortization of intangible assets		20,342	16,753
Interest expense, net		8,713	7,921
Other expenses, net		508	2,209
Total costs and expenses		298,073	263,275

Earnings before income taxes		40,954	33,069
Income tax expense		8,219	8,314
Earnings from continuing operations		32,735	24,755
Earnings from discontinued operations, net of tax expense of $0 and $599		—	1,310

Net earnings	$	32,735	26,065

Earnings per share:
Basic – Continuing operations	$	1.26	0.96
– Discontinued operations		0.00	0.05
– Net earnings	$	1.26	1.01

Diluted – Continuing operations	$	1.26	0.96
– Discontinued operations		0.00	0.05
– Net earnings	$	1.26	1.01


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


	Nine Months Ended
	June 30,
	2026		2025

Net sales	$	938,027	742,714
Costs and expenses:
Cost of sales		545,274	431,068
Selling, general and administrative expenses		195,039	171,305
Amortization of intangible assets		61,086	32,735
Interest expense, net		13,992	12,373
Other expenses, net		2,340	1,947
Total costs and expenses		817,731	649,428

Earnings before income taxes		120,296	93,286
Income tax expense		25,314	21,841
Earnings from continuing operations		94,982	71,445
Earnings from discontinued operations, net of tax expense of $363 and $3,006		1,177	9,126

Net earnings	$	96,159	80,571

Earnings per share:

Basic – Continuing operations	$	3.66	2.77
– Discontinued operations		0.05	0.35
– Net earnings	$	3.71	3.12

Diluted – Continuing operations	$	3.66	2.76
– Discontinued operations		0.05	0.35
– Net earnings	$	3.71	3.11


		June 30,			September 30,
		2026			2025
ASSETS
Current assets:
Cash and cash equivalents		$	73,236			101,350
Accounts receivable, net of allowance for credit losses of $2,712 and $3,205, respectively			267,493			253,554
Contract assets			127,620			90,730
Inventories			240,542			217,807
Other current assets			46,620			25,065
Total current assets			755,511			688,506
Property, plant and equipment, net of accumulated depreciation of $200,107 and $186,796, respectively			175,282			172,493
Intangible assets, net of accumulated amortization of $348,052 and $286,965, respectively			664,450			723,973
Goodwill			760,275			761,931
Operating lease assets			47,271			47,707
Other assets			17,214			15,778
Total assets		$	2,420,003			2,410,388

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt		$	20,000			20,000
Accounts payable			116,539			96,534
Contract liabilities			288,142			216,590
Accrued salaries			54,995			53,301
Income tax payable - current			5,754			62,007
Accrued other expenses			61,263			59,716
Total current liabilities			546,693			508,148
Deferred tax liabilities			115,333			112,390
Non-current operating lease liabilities			44,107			44,403
Other liabilities			31,608			38,576
Long-term debt			65,000			166,000
Total liabilities			802,741			869,517
Shareholders’ equity:
Preferred stock, par value $.01 per share, authorized 10,000,000 shares			—			—
Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,964,140 and 30,886,024 shares, respectively			310			309
Additional paid-in capital			315,600			316,194
Retained earnings			1,463,854			1,373,911
Accumulated other comprehensive income (loss), net of tax			(15,427)			(2,468)
			1,764,337			1,687,946
Less treasury stock, at cost: 5,056,771 and 5,056,771 common shares, respectively			(147,075)			(147,075)
Total shareholders’ equity			1,617,262			1,540,871
Total liabilities and shareholders’ equity		$	2,420,003			2,410,388


	Three Months			Nine Months
	Ended June 30,			Ended June 30,
	2026	2025		2026		2025
Weighted Average Shares Outstanding — Basic	25,907	25,825		25,887		25,806
Dilutive Shares	73	93		45		70
Adjusted Shares — Diluted	25,980	25,918		25,932		25,876


	June 30,		September 30,
(In thousands)	2026		2025
Finished goods	$	55,739	52,644
Work in process		59,650	46,825
Raw materials		125,153	118,338
Total inventories	$	240,542	217,807


		June 30,			September 30,
(Dollars in thousands)		2026			2025
Goodwill		$	760,275		761,931

Intangible assets with determinable lives:
Patents
Gross carrying amount		$	7,918		7,607
Less: accumulated amortization			2,161		1,775
Net		$	5,757		5,832

Capitalized software
Gross carrying amount		$	146,078		138,144
Less: accumulated amortization			108,658		100,818
Net		$	37,420		37,326

Customer relationships
Gross carrying amount		$	619,890		625,535
Less: accumulated amortization			188,725		159,543
Net		$	431,165		465,992

Other
Gross carrying amount		$	76,401		76,991
Less: accumulated amortization			48,506		24,829
Net		$	27,895		52,162
Intangible assets with indefinite lives:
Trade names		$	162,213		162,661


(Dollars in millions)	A&D		Test	USG		Total
Balance as of September 30, 2025	$	334.0	67.8	360.1		761.9
Acquisition activity and other		5.1	—	—		5.1
Foreign currency translation		(3.0)	(0.9)	(2.8)		(6.7)
Balance as of June 30, 2026	$	336.1	66.9	357.3		760.3


Three Months Ended June 30, 2026									Segment
(In thousands)		A&D			USG		Test		Total
Net Sales		$	168,202		99,963		70,862			339,027

Cost of sales			100,724		48,267		48,518
SG&A expense			16,694		27,668		10,116
Amortization of intangible assets			148		1,983		503
Other expenses, net			218		62		843
Segment profit		$	50,418		21,983		10,882			83,283

Depreciation and Amortization		$	3,456		4,082		1,433			8,971
Segment Assets		$	445,178		285,583		200,907			931,668
Capital Expenditures		$	8,943		1,767		662			11,372

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above									$	83,283
Less:
Unallocated Corporate SG&A and Other expenses, net										(15,907)
Unallocated amortization of intangible assets										(17,709)
Interest expense, net										(8,713)
Earnings before Income Taxes									$	40,954

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization									$	8,971
Add: Corporate Depreciation and Amortization										17,772
Consolidated totals									$	26,743

Reconciliation of segment assets to consolidated totals

Segment Assets total									$	931,668
Add:
Goodwill not allocated to segments										760,275
Acquired intangible assets not allocated to segments										621,272	(1)
Other unallocated amounts										106,788
Consolidated totals									$	2,420,003


Reconciliation of segment capital expenditures to consolidated totals

Segment Capital Expenditures	$	11,372
Add: Corporate Capital Expenditures		55
Consolidated totals	$	11,427


	Nine Months Ended
	June 30,
	2026		2025
Cash flows from operating activities:
Net earnings	$	96,159	80,571
Adjustments to reconcile net earnings to net cash provided by operating activities:
Earnings from discontinued operations, net of tax		(1,177)	(9,126)
Depreciation and amortization		80,073	48,401
Stock compensation expense		10,182	7,934
Changes in assets and liabilities		2,983	(33,473)
Effect of deferred taxes		5,157	(6,008)
Net cash provided by operating activities – continuing operations		193,377	88,299
Net cash (used) provided by operating activities – discontinued operations		(59,340)	43,703
Net cash provided by operating activities		134,037	132,002
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(10,232)	(472,006)
Capital expenditures		(24,560)	(24,210)
Additions to capitalized software and other		(7,874)	(13,018)
Net cash used by investing activities – continuing operations		(42,666)	(509,234)
Net cash provided (used) by investing activities – discontinued operations		1,540	(966)
Net cash used by investing activities		(41,126)	(510,200)
Cash flows from financing activities:
Proceeds from long-term debt		130,000	645,000
Principal payments on long-term debt		(231,000)	(242,000)
Debt issuance costs		(1,293)	—
Dividends paid		(6,216)	(6,196)
Other		(10,646)	(6,205)
Net cash used by financing activities – continuing operations		(119,155)	390,599
Net cash used by financing activities – discontinued operations		—	—
Net cash used by financing activities		(119,155)	390,599
Effect of exchange rate changes on cash and cash equivalents		(1,870)	452
Net (decrease) increase in cash and cash equivalents		(28,114)	12,853
Cash and cash equivalents, beginning of period		101,350	65,963
Cash and cash equivalents, end of period	$	73,236	78,816

Supplemental cash flow information:
Interest paid	$	13,587	16,038
Income taxes paid (including state and foreign)	$	71,905	29,059


	June 30,		September 30,
(In thousands)	2026		2025
Revolving credit facility	$	45,000	25,000
Incremental facility (Term loan A)		40,000	161,000
Total borrowings	$	85,000	186,000
Current portion of long-term debt		(20,000)	(20,000)
Total long-term debt, less current portion	$	65,000	166,000


Three months ended June 30, 2026
(In thousands)	A&D		USG		Test		Total
Customer type:
Commercial	$	51,604		97,572		54,850		204,026
Government		116,598		2,391		16,012		135,001
Total revenues	$	168,202		99,963		70,862		339,027

Geographic location:
United States	$	110,189		63,722		44,222		218,133
International		58,013		36,241		26,640		120,894
Total revenues	$	168,202		99,963		70,862		339,027

Revenue recognition method:
Point in time	$	72,978		80,818		13,608		167,404
Over time		95,224		19,145		57,254		171,623
Total revenues	$	168,202		99,963		70,862		339,027


Nine months ended June 30, 2026
(In thousands)		A&D			USG		Test		Total
Customer type:
Commercial		$	153,336			273,291		156,396		583,023
Government			309,005			7,685		38,314		355,004
Total revenues		$	462,341			280,976		194,710		938,027

Geographic location:
United States		$	302,584			183,319		121,276		607,179
International			159,757			97,657		73,434		330,848
Total revenues		$	462,341			280,976		194,710		938,027

Revenue recognition method:
Point in time		$	209,389			224,333		40,908		474,630
Over time			252,952			56,643		153,802		463,397
Total revenues		$	462,341			280,976		194,710		938,027


Reconciliation of segment capital expenditures to consolidated totals

Segment Capital Expenditures	$	24,449
Add: Corporate Capital Expenditures		111
Consolidated totals	$	24,560


Three Months Ended June 30, 2025					Segment
(In thousands)	A&D		USG	Test	Total
Net Sales	$	136,324	92,357	67,663		296,344

Cost of sales		84,644	43,721	46,110
SG&A expense		14,082	24,058	9,738
Amortization of intangible assets		201	2,327	532
Other expenses, net		820	711	551
Segment profit	$	36,577	21,540	10,732		68,849

Depreciation and Amortization	$	3,059	4,246	1,496		8,801
Segment Assets	$	369,770	285,887	190,341		845,998
Capital Expenditures	$	4,629	2,054	934		7,617

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above					$	68,849
Less:
Unallocated Corporate SG&A and Other expenses, net						(14,166)
Unallocated amortization of intangible assets						(13,693)
Interest expense, net						(7,921)
Earnings before Income Taxes					$	33,069

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization					$	8,801
Add: Corporate Depreciation and Amortization						13,559
Consolidated totals					$	22,360

Reconciliation of segment assets to consolidated totals

Segment Assets total					$	845,998
Add:
Goodwill not allocated to segments						760,555
Acquired intangible assets not allocated to segments						701,650
Other unallocated amounts						106,842
Consolidated totals					$	2,415,045


Nine Months Ended June 30, 2025					Segment
(In thousands)	A&D		USG	Test	Total
Net Sales	$	307,819	269,784	165,111		742,714

Cost of sales		192,760	126,481	112,082
SG&A expense		35,544	74,317	28,487
Amortization of intangible assets		742	6,417	1,608
Other expenses (income), net		527	(239)	1,411
Segment profit	$	78,246	62,808	21,523		162,577

Depreciation and Amortization	$	8,545	11,998	4,225		24,768
Segment Assets	$	369,770	285,887	190,341		845,998
Capital Expenditures	$	10,552	7,639	3,439		21,630

Reconciliation of segment profit to Earnings before Income Taxes

Segment profit total from above					$	162,577
Less:
Unallocated Corporate SG&A and Other expenses, net						(32,950)
Unallocated amortization of intangible assets						(23,968)
Interest expense, net						(12,373)
Earnings before Income Taxes					$	93,286

Reconciliation of segment depreciation and amortization to consolidated totals

Segment Depreciation and Amortization					$	24,768
Add: Corporate Depreciation and Amortization						23,633
Consolidated totals					$	48,401

Reconciliation of segment assets to consolidated totals

Segment Assets total					$	845,998
Add:
Goodwill not allocated to segments						760,555
Acquired intangible assets not allocated to segments						701,650
Other unallocated amounts						106,842
Consolidated totals					$	2,415,045


	Three Months Ended June 30,			Nine Months Ended June 30,
	2026		2025	2026	2025
Common stock
Beginning balance	$	310	309	309	308
Stock plans		—	—	1	1
Ending balance	$	310	309	310	309

Additional paid-in-capital
Beginning balance	$	312,304	311,438	316,194	311,942
Stock plans		3,296	2,211	(594)	1,707
Ending balance	$	315,600	313,649	315,600	313,649

Retained earnings
Beginning balance	$	1,433,192	1,133,326	1,373,911	1,082,950
Net earnings common stockholders		32,735	26,065	96,159	80,571
Dividends paid		(2,073)	(2,066)	(6,216)	(6,196)
Ending balance	$	1,463,854	1,157,325	1,463,854	1,157,325

Accumulated other comprehensive income (loss)
Beginning balance	$	(13,311)	(20,670)	(2,468)	(10,775)
Foreign currency translation		(2,116)	23,076	(12,959)	13,181
Ending balance	$	(15,427)	2,406	(15,427)	2,406

Treasury stock
Beginning balance	$	(147,075)	(147,075)	(147,075)	(147,075)
Share repurchases		—	—	—	—
Ending balance	$	(147,075)	(147,075)	(147,075)	(147,075)

Total equity	$	1,617,262	1,326,614	1,617,262	1,326,614


(Dollars in thousands)	Operating		Finance
Years Ending September 30:	Leases		Leases
2026 (excluding the nine months ended June 30, 2026)	$	2,089	577
2027		8,292	2,357
2028		8,124	2,417
2029		6,643	2,478
2030 and thereafter		37,584	11,575
Total minimum lease payments		62,732	19,404
Less: amounts representing interest		12,472	4,008
Present value of net minimum lease payments	$	50,260	15,396
Less: current portion of lease obligations		6,153	1,647
Non-current portion of lease obligations		44,107	13,749

ROU assets	$	47,271	11,078

Exhibit Number	Description	Document Location

3.1(a)	Restated Articles of Incorporation	Exhibit 3(a) to the Company’s Form 10-K for the fiscal year ended September 30, 1999

3.1(b)	Amended Certificate of Designation, Preferences and Rights of Series A Participating Cumulative Preferred Stock of the Registrant	Exhibit 4(e) to the Company’s Form 10-Q for the fiscal quarter ended March 31, 2000

3.1(c)	Articles of Merger effective July 10, 2000	Exhibit 3(c) to the Company’s Form 10-Q for the fiscal quarter ended June 30, 2000

3.1(d)	Amendment of Articles of Incorporation effective February 5, 2018	Exhibit 3.1 to the Company’s Form 8-K filed February 7, 2018

3.2	Bylaws	Exhibit 3.1 to the Company’s Form 8-K filed November 22, 2022

4.1(a)	Amended and Restated Credit Agreement dated August 30, 2023	Exhibit 10.1 to the Company’s Form 8-K filed September 6, 2023

4.1(b)	Amendment No. 1 dated as of August 5, 2024 to the Amended and Restated Credit Agreement dated August 30, 2023	Exhibit 10.1(c) to the Company’s Form 10-K for the fiscal year ended September 30, 2024

4.2(c)	Agreement dated April 15, 2026 between TBG AG as Seller and ESCO Technologies Inc. as Buyer, incorporated by reference to Exhibit 10.1 hereto	Exhibit 10.1 hereto

4.2(d)	Shareholder Agreement between ESCO Technologies Inc. and TBG AG, incorporated by reference to Exhibit 10.2 hereto	Exhibit 10.2 hereto

4.2(e)	Credit Agreement dated as of May 29, 2026, incorporated by reference to Exhibit 10.3 hereto	Exhibit 10.3 hereto

10.1	Agreement dated April 15, 2026 between TBG AG as Seller and ESCO Technologies Inc. as Buyer for the sale and purchase of the share capital of Megger Group Limited	Exhibit 10.1 to the Company’s Form 8-K filed April 16, 2026

10.2	Form of Shareholder Agreement to be executed concurrently with completion of the Agreement described in Exhibit 10.1	Exhibit 10.2 to the Company’s Form 8-K filed April 16, 2026

10.3	Credit Agreement dated as of May 29, 2026, among ESCO Technologies Inc. and certain of its subsidiaries as Borrower, certain Lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A. as Syndication Agent, and BMO Capital Markets Corp., Commerce Bank, Regions Capital Markets, a Division of Regions Bank, TD Bank, N.A. and Wells Fargo Bank, National Association, as Co-Documentation Agents, to become effective concurrently with completion of the Agreement described in Exhibit 10.1	Exhibit 10.1 to the Company’s Form 8-K filed June 3, 2026

31.1	Certification of Chief Executive Officer	Filed herewith

31.2	Certification of Chief Financial Officer	Filed herewith

32	Certification of Chief Executive Officer and Chief Financial Officer	Filed herewith

101.INS	XBRL Instance Document*	Submitted herewith

101.SCH	XBRL Schema Document*	Submitted herewith

101.CAL	XBRL Calculation Linkbase Document*	Submitted herewith

101.DEF	XBRL Definition Linkbase Document*	Submitted herewith

101.LAB	XBRL Label Linkbase Document*	Submitted herewith

101.PRE	XBRL Presentation Linkbase Document*	Submitted herewith

104	Cover Page Interactive Data File (contained in Exhibit 101)	Submitted herewith

	ESCO TECHNOLOGIES INC.

	/s/ Christopher L. Tucker
	Christopher L. Tucker
	Senior Vice President and Chief Financial Officer
	(As duly authorized officer and principal accounting and financial officer of the registrant)

Dated: August 10, 2026

	/s/ Bryan H. Sayler
	Bryan H. Sayler
	President and Chief Executive Officer